India trumpets the tablet computer Aakash as low-cost, high-tech innovation required to bridge the digital divide. It couldn’t be more wrong.

Aakash is not true innovation. It is a simple contract manufacturing job that should make scrappy computer makers swell with pride, not something that behooves an IT behemoth and a nation on the rise. It would have been a remarkable story if the nation had actually created such a low-cost computer. But it has merely assembled one through a third-party vendor.

It hired IIT-Rajasthan to make technical specifications (most of which it got wrong anyway) for the gadget, floated tenders and picked the lowest bidder to install the free Android software on cheap imported hardware—all in the belief that such a computer would deliver value to users who could otherwise not afford the iPad or any other computer, for that matter.

Assembling a low-cost computer in this fashion requires little engineering excellence. It only requires nifty business sense and is best left to the free market’s “animal spirits.”

Long before the Indian government entered the fray, dozens of manufacturers in Taiwan and the Far East put together similar low-priced tablets out in the marketplace. In recent months, so have several Indian companies. Among them are giants such as Airtel, HCL and Reliance Telecom, upstarts like MicroMax and several more.

No Indian seller has matched Aakash’s price yet but have products with superior features. One Taiwan maker sells an Android tablet running on a faster processor, with a webcam, for about $40, which is cheaper than the price of the commercial version of Aakash, called UbiSlate.

Among other deficiencies, it has a low battery life, a resistive touch-screen with a delayed response, and virtually no apps for the Indian market. It is no surprise that, for all practical purposes, Aakash-I has been deemed unusable, meaning it is only a $35 brick.

Even in the manner of designing Aakash, India has demonstrated a high degree of incompetence, on account of which the cheap tablet may never reach its intended poor users in time. IIT-Rajasthan’s specs, initially, were woefully short of what is required to use the tablet to any purpose.

Among other deficiencies, it has a low battery life, a resistive touch-screen with a delayed response, and virtually no apps for the Indian market. It is no surprise that, for all practical purposes, Aakash-I has been deemed unusable, meaning it is only a $35 brick. At a later stage, IIT-Rajasthan swung the opposite side—perversely seeking military-standard durability for a low-cost device.

The upshot of this has been a running dispute between DataWind—the Canadian company that won the right to build Aakash—and IIT-Rajasthan, on one hand, and DataWind and the Indian government, on the other. 

Efforts are afoot to improve the second version of Aakash but don’t expect any miracles here. The upgrades are modest, given technology’s progress and user expectations, and probably insufficient to win users. Also, it is far from clear who will manufacture Aakash II and when because of DataWind’s dispute with the government.

It is conceivable that Indian sellers could come up with a $50 tablet PC (the actual cost of Aakash, without the government subsidy) or a superior one at slightly higher cost and virtually eliminate Aakash’s potential market.

If that happens, India will fall short even of its terribly short-sighted goal of producing a low-cost computer and the recent budget allocation of Rs 765 crore for Aakash would be more taxpayer money down the drain.

Aakash is a result of policy ineptness and intellectual sloth—a field that has brought us billions of dollars in foreign exchange and has created hundreds of thousands of jobs. The government has not learnt how to tap a large (and low-cost) pool of software engineers, not to mention entrepreneurial energy, for higher technology.

It has encouraged software services companies, showering them with tax benefits and facilities. It also has set up several undergraduate institutions to churn out engineering and science graduates to feed the software services companies. But it has stopped there, without an earnest to set up centres of research excellence.

Ten years ago, the BJP-led government negotiated with MIT’s Media Lab, a cutting-edge innovation lab and pioneers of the low-cost computer, and was close to a deal to set up a similar centre of excellence and innovation.

However, it foundered on the egos of Nicholas Negroponte, then the lab’s director, and Arun Shourie, then India’s information technology minister.

Negroponte wanted more autonomy as well as global salaries for the Indian centre’s researchers. Shourie rejected both, and contended that nobody could be paid higher than the country’s best scientist—the head of the Indian Space Research Organisation.

That ended probably India’s last opportunity to rapidly build a world-class institution of sustainable value. In 2004, the two parties called off the plan.

A pity, from the Indian perspective, was the lack of an alternate plan on the part of Shourie (or his successors in the IT Ministry) to shore up IT research and low-cost innovation needed for a developing country.

It would be reasonable to believe India is a “big boy” capable of establishing a center of IT excellence on its own. It could even have tapped the likes of Arun Netravali, who in the 1990s headed the famous Bell Labs (which gave to the world the transistor, laser, optical fiber and cell phone) to create a centre of research. But India’s record is limited.

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If you ignore the Indian Space Research Organisation, which has a monopoly over space R&D, India’s most significant success has been the C-Dot, or Centre for the Development of Telematics. Established in 1984 by Prime Minister Rajiv Gandhi, the agency tapped the expertise of Sam Pitroda, a successful Indian American entrepreneur who returned to serve the country.

C-DoT developed low-cost telephone exchanges, thus taking the telephone network to Indian villages. However, the Indian government’s IT and communications revolution started and ended with C-DoT.

In the period since, it has attempted little and achieved little on that scale. The best thing it may have done is free up spectrum for private companies to provide cellphone services, truly revolutionising the telecom space.

Today, the country has more cellphones than wired phones, and the cellphone has achieved in a little over a decade what its landed counterpart did in over 50 years.

Yesteryear monopolies such as BSNL and ITI, to name two public sector telecom giants, have become fringe players with little intellectual property and are not at the cutting-edge of technology.

Regardless of the C-DoT’s success—trounced in later years by the achievements of cellular technology—experience suggests the government succeeds best when it creates an enabling regime for private companies, and itself stays out of the commercial market.

So, why is India dabbling with low-cost tablet computers, instead of leaving this type of simple innovation to the private sector?

In a poor country like India, the government still has an important role to play in bridging the digital divide. It can’t simply sit aside and watch large sections of its population being shut out of modern technology. Still, what exactly should it do?

It has three possible choices.

One, it can continue to contract manufacture copycat gadgets like Aakash and sell them for a modest price to sections of the population that cannot afford higher-priced originals.

This would mean India will never develop any breathtaking new technology and will languish at the bottom of the value chain. Given the experience with Aakash, it is not clear the government can achieve even this modest goal of empowering the masses.

Besides, genuine low-cost innovation is taking place in the private sector. The automobile sector would be a very good example of it, even though it is by no means the only one.

Such innovation appears to be occurring at a slower pace in IT, mainly because Indian companies do not favourably compare with their global peers. Still, MicroMax produced stunning innovation in cellphones with its dual-SIM handsets, giving Nokia a run for its money in the Indian market. It has now launched cheap tablets, too.

The lesson to policymakers should be clear: Such innovation is best left to private players.

The second option would be to set up dedicated centres of IT excellence that can fuel broader development of high-level technologies. Such technologies can empower people in diverse ways and lead to lucrative deals, too. Many countries have done this successfully, pioneering vital breakthroughs.

Australia’s Commonwealth Scientific and Industrial Research Organisation, for example, developed a vital Wi-Fi patent—solving, loosely speaking, a last-metre problem for high-speed exchange of large amounts of data, especially in indoor environments.

Today, that is used in an estimated six billion devices across the world and has fetched CSIRO nearly a billion dollars. It could have earned far more had it sought patents in India, China and other emerging markets.

Unfortunately, India’s existing research agencies lack focus on IT. That is why the proposed alliance with MIT’s Media Lab was critical to high-tech progress. A decade after its failure, India doesn’t have a roadmap.

Given the government’s preoccupations, it is hard to imagine that anything tangible will emerge. Besides, even in the US, state funding for R&D, including space programmes, has diminished, leading many to speculate a paradigm change in the way research takes place in the 21st century.

The third, and probably most feasible, option is to simply create an enabling policy regime, infrastructure and entrepreneurial ecosystem, and leave R&D in the hands of the private sector. Despite the many controversies, it has successfully done this for cellular services, truly ushering in a telecom revolution.

However, India might need to do far more on the infrastructure front. Also, like Australia’s Clean Tech programme, India could set up sovereign venture funds—managed by professional venture capitalists—to target specific areas of IT that, in turn, can lead to broader growth and development.

What India needs today is not an Aakash but a coherent plan that will create true innovation and let a million ideas flower.